LIVERPOOL council has written to the Government for money to give homebuyers deposit grants to help kick start the bottom of the housing market.

It follows the revelation that the local authority has started investigating the possibility of selling its own mortgages.

The council’s finance director, Phil Halsall, is now in talks with a possible funding partner about providing mortgages.

Now the council wants a share of £200m the Government has set aside to buy unsold homes to give deposit grants to needy families and first-time buyers.

The scheme would work by helping prospective buyers raise the full deposit they required for a mortgage through a grant.

For example, if the buyer needed to raise £20,000 but only had £5,000 the council would step in with the £15,000 difference.

Deputy council leader Flo Clucas said it could be the case of giving a straight loan or an equity guarantee scheme where the money were only repayable if the buyer sold their home within a specific period.

Last month, Commons leader Harriet Harman told MPs that the Government was setting aside £200m for housing associations to purchase unsold homes.

But the money would only buy 1,500 homes priced at an average £133,000, and Liverpool council believes the money would be better spent on other schemes.

Cllr Clucas and Cllr Marilyn Fielding, executive member for housing, have written to Ms Harman offering Liverpool as a pilot study into deposit grants.

Cllr Fielding said: “Making available £200m to buy up unsold homes will not solve the slowdown in the national housing market.

“Housing associations can ill afford to take on the additional financial burden of buying up properties.”

Cllr Clucas added: “The money would be better used if it was given to local councils and could instead be used to kick start more shared equity schemes, or deposit guarantee schemes”.

She said the council was offering to run a pilot project for the government to test the success of the idea.

Homebuyers looking to buy in housing market renewal (HMRI) areas – particularly in north Liverpool – are most likely to qualify for the scheme if the council is successful.

davidbartlett